India Morning Call-Global Markets

EQUITIES

NEW YORK - U.S. stocks fell on Wednesday after comments from Federal Reserve Chair Janet Yellen raised the possibility of an earlier- than-anticipated increase in interest rates.

The central bank dropped the U.S. unemployment rate as its definitive yardstick for gauging the economy’s strength and made clear it would rely on a wide range of measures in deciding when to raise interest rates

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LONDON - Britain’s top shares fell on Wednesday as major insurance stocks suffered a sell-off after changes announced in the UK budget threatened their profits.

The budget also dealt a blow to gambling companies such as William Hill and Ladbrokes LAD.L after the government announced a new tax on certain betting machines.

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TOKYO - Japanese stocks retreated from one-week highs on Thursday after Federal Reserve Chair Janet Yellen raised the prospect of interest rate hikes starting earlier than previously thought, sparking a selloff in equity markets and lifting the U.S. dollar.

The weaker yen helped to contain broader market losses as a softer Japanese currency is generally seen as a positive for exporters’ income.

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HONG KONG - Hang Seng Index set to open down 1.0 percent.

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FOREIGN EXCHANGE

SYDNEY - The dollar traded at two-week highs against a basket of major currencies early on Thursday, having posted solid gains after comments from Fed Chair Janet Yellen prompted markets to bring forward interest rate hike expectations.

Yellen said the Federal Reserve will probably end its massive bond-buying program this coming fall, and could start to raise interest rates around six months later, sooner than markets had anticipated

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TREASURIES

NEW YORK - U.S. government debt prices sank on Wednesday on the perception that Federal Reserve policy-makers will start raising interest rates sooner than expected.

Speaking at a press conference after the Fed’s two day policy meeting, Fed Chair Janet Yellen spooked traders saying around six months after its current asset purchase program ends might be a “considerable period” when it might raise rates.

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COMMODITIES

GOLD

SINGAPORE - Gold hit its weakest in three weeks on Thursday as the U.S. dollar jumped on expectations the Federal Reserve could end its bond-buying programme this fall, hurting the metal’s safe haven appeal as a hedge against inflation.

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BASE METALS

SYDNEY - London copper fell on Thursday but remained well above three-and-a-half year lows hit the session before, after the Federal Reserve chair signalled interest rates could rise next year, eroding support for liquidity friendly commodities.

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OIL

NEW YORK - Brent oil futures fell on Wednesday as worries over sanctions affecting Russian oil supplies eased, while U.S. crude oil rose on an inventory draw at the benchmark’s pricing hub and ahead of the front month contract’s expiration.

Western sanctions imposed on Monday against Russia over its annexation of Ukraine’s Crimea targeted individuals accused of involvement and not broad trade.